How factory reset process looks in details?

So I tried to find answer for this question, but it is very hard to find something other than simple instruction of doing factory reset and backuping data. I'm interested of detailed process of the factory reset. When I force system to do this, what is going under the shell. It is some image on hidden partition from bootloader boots "clear" system? Or maybe it's just deleting user configuration files, and every corrupted system file states same as before reset. Or maybe there is the way of checking hash of critical files and repair them from some kind of recovery image?